Stifled West Bank economy drains Palestinians’ hopes

Passers-by linger in front of the window displays on a main shopping street in central Hebron but seem reluctant to enter the stores. In the old market, vendors call out their wares but are largely ignored.

The city is the largest in the West Bank and a major commercial and industrial hub, accounting for about one third of the West Bank’s GDP. Recently it was also the scene of some of the worst violence during Palestinian economic protests.

Locals blame the discontent on high unemployment, low wages and the rising cost of living as well as the heavy burden of consumer debt.

“Our economy depends 100% on customers and as you can see, now the customers have no money,” says Ayman, a tour guide.

As the global recession plays out, the Palestinians are not alone in facing such woes. Yet, as a recent World Bank report highlighted, there are some unique factors that also hurt their economy.

The Palestinian Authority (PA) relies on international aid but has seen a recent shortfall in donor funding, the World Bank says, while the Israeli occupation of the West Bank sets obstacles that “constrain investment, raise costs and hinder economic cohesion”.

Worryingly for the international community, committed to a two-state solution to the Israel-Palestinian conflict, there are now many ordinary Palestinians who conclude that the 1993 Oslo Accords should be scrapped.

“We need to go back 20 or 25 years before Oslo. The basic rules of this commitment are so bad for the Palestinian people,” says Amr, who runs a market-stall in Hebron.

Settlement growth

The interim peace agreement produced the current zoning of the West Bank where the main Palestinian urban areas are under the administrative and security control of the PA, but 62%, known as Area C, remains under full Israeli control.

Economic protests in Hebron last month were some of the largest in the West Bank

Jewish settlements have rapidly expanded in Area C in the two decades since the Oslo Accords were signed. The World Bank warns that this restricts the fertile land and water available to Palestinians.

In Hebron, there is also an Israeli military presence to protect about 500 settlers who live inside the city. A survey by Israeli human rights groups in 2007 found that in the area they occupy over 1,800 businesses and warehouses had closed since the start of the second Palestinian intifada, or uprising. This was due to movement restrictions and some military orders.

“The Old City has been badly affected because of clashes and the Israeli soldiers coming overnight. Many people have moved out because they don’t feel safe,” says Omar al-Hroub, owner of a jewellery store.

The local governor, Kamal Ahmed is not surprised that Hebron residents have been venting their frustration.

“When we signed the Oslo Agreement we promised many things – freedom, ending the occupation, an independent state and a very good economic situation. It was supposed to take five years, but nothing happened,” he says. “For this reason they are angry.”